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Temporary Rescission of Job Offer Isn’t Adverse Employment Action

March 21, 2022

Federal law bans employment discrimination against current or prospective employees based on race, age, and other protected classes. Additionally, it prohibits adverse action against employees based on a consumer report unless the findings are provided to the individual. Are the provisions violated when a prospective employee’s job offer is briefly rescinded and then reinstated? The U.S. 7th Circuit Court of Appeals (which covers Illinois, Indiana, and Wisconsin) recently addressed the issue.

Background on Title VII, ADEA, FCRA

Both Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act (ADEA) protect current and prospective employees from discrimination by employers. Title VII prohibits employment bias based on race, color, religion, sex, and national origin. The ADEA prohibits discrimination against employees ages 40 and older. Specifically, to succeed on a claim against an employer, both provisions require employees to demonstrate they suffered an adverse employment action.

Additionally, under the Fair Credit Reporting Act (FCRA), an employer may not take any adverse action against a job applicant based on a consumer report without first providing a copy to the individual. The FCRA defines “adverse action” as a denial of employment or a decision for work purposes that adversely affects any prospective employee.

Facts

Najiy-Ullah Aziyz, an African-American man over the age of 40, accepted a job offer with Cameca, Inc., conditioned on a background check. A week later, he was informed the offer was being rescinded based on a felony conviction from almost 30 years ago. The following day, however, company officials let him know the rescission was a mistake. They apologized, assured him he still had the job, and pledged to treat him fairly.

On the day Aziyz was scheduled to begin the job, he informed Cameca he wouldn’t work for the company because he feared retaliation. The employer later filled the position with a younger candidate, who wasn’t an African American.

Aziyz then sued Cameca, alleging violations of Title VII, the ADEA, and the FCRA. He asserted:

  • Cameca’s policy of considering past convictions has a disparate impact on African-American applicants because they are incarcerated at a higher rate than other races;
  • The employer’s decision to hire a younger applicant constituted age discrimination; and
  • The failure to disclose the background report before rescinding the job offer violated the FCRA.

The district court granted Cameca’s request to dismiss for failure to state a claim, finding Aziyz never adequately pleaded he had suffered an adverse employment action. He appealed the decision to the 7th Circuit.

7th Circuit’s Decision

Title VII. On appeal, the 7th Circuit first considered whether Aziyz alleged a sufficient connection between Cameca’s practice of investigating past convictions and a disparate impact on African-American applicants. The court found his discrimination claims couldn’t stand because he never established he suffered an adverse employment action, an essential element for race and age discrimination claims.

Aziyz argued Cameca had no intention to follow through with the job offer. The court gave the argument no merit, however, because he rejected the offer to begin his employment.

ADEA. The 7th Circuit then explained Aziyz’s age discrimination claim also failed because he rejected the job offer. To state an age claim under a failure-to-hire theory, he had to show he was passed over in favor of a similar, younger applicant. Because he rejected the offer, however, Cameca’s later hiring of a younger candidate didn’t constitute age discrimination.

FCRA. Finally, the 7th Circuit considered Aziyz’s claim under the FCRA. Although agreeing Cameca would be required to provide a copy of the background report if it caused an adverse action, the court emphasized that the temporary rescission of a job offer doesn’t satisfy the Act’s definition of “adverse action,” which requires a denial of employment or a decision for work purposes that adversely effects any prospective employee. The court reasoned Cameca hadn’t denied employment or otherwise made a work decision that harmed Aziyz.

The 7th Circuit concluded the district court was correct to dismiss Aziyz’s claims. Ultimately, he couldn’t proceed because he hadn’t shown he had suffered any “adverse action” as required by Title VII, the ADEA, and the FCRA.

Bottom Line

Many employment discrimination claims require the current or prospective employee to suffer an adverse employment action. Notably, the 7th Circuit doesn’t consider a temporary rescission of a job offer to constitute an adverse action. If you have concerns about whether an employment action could lead to a discrimination claim, you should consult with a qualified attorney.

This article, slightly modified to note recent updates, was featured online in the Wisconsin Employment Law Letter and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.